An employee arranges bottles of Coca-Cola at a store in Alexandria, Virginia October 16, 2012. REUTERS/Kevin Lamarque

The world’s largest soft drink maker, with brands such as Sprite, Fanta and Minute Maid, on Tuesday said worldwide sales volume climbed 3 percent, but volume in Europe fell 5 percent.

Last year “saw the extension of prolonged uncertainty in Europe, the ongoing transition of the economy in China, the lukewarm recovery in the United States, and ongoing challenges for Japanese consumers,” Chief Executive Muhtar Kent said on a conference call. “We expect this volatility to extend through 2013.”

Fourth-quarter volume dropped 5 percent in Germany, more than some analysts had expected, and was down 4 percent in China, also weaker than some expected.

“I think they’re diverse enough so that some things go up and some things go down and they manage OK,” said Bernstein Research analyst Ali Dibadj. “You certainly wish they were firing on all cylinders, but this environment doesn’t necessarily allow that to happen.”

Coca-Cola does not give financial forecasts but said that for the full year 2013 it expects $100 million in increased commodity costs related to sweeteners, juices, metals and plastic.

Coke is also seeing tougher competition from PepsiCo Inc PEP.N, which is working hard to improve its North American beverage business. Pepsi has increased marketing spending with a focus on core brands like Pepsi-Cola, and analysts say the renewed effort is working.

“Unfortunately, given that volumes aren’t that robust, the success of one player certainly has a negative impact on the success of the other,” Dibadj said.

PepsiCo is due to report quarterly earnings on Thursday.

Coke said fourth-quarter net income was $1.87 billion, or 41 cents per share, up from $1.66 billion, or 36 cents per share, a year earlier.

Excluding restructuring charges and other one-time items, earnings were 45 cents per share, topping analysts’ average estimate by a penny, according to Thomson Reuters I/B/E/S.